RELIEF FOR RATEPAYERS?

San Onofre outage spurs call for concessions to customers, but such breaks are rare and can take years to negotiate

** FILE ** Armed with an M-16 rifle, Citrus County Sheriff’s Deputy Joseph Casola stands guard outside Florida Power’s Crystal River Energy Complex, which includes a nuclear power plant in Cyrstal River, Fla., in this Oct. 31, 2001 file photo. A government defense plan for nuclear power plants assumes an attack would come from less than half the number of Sept. 11 hijackers and they wouldn’t be armed with rocket-propelled grenades or other weapons often used by terrorists overseas. (AP Photo/Chris O’Meara, File)

** FILE ** Armed with an M-16 rifle, Citrus County Sheriff’s Deputy Joseph Casola stands guard outside Florida Power’s Crystal River Energy Complex, which includes a nuclear power plant in Cyrstal River, Fla., in this Oct. 31, 2001 file photo. A government defense plan for nuclear power plants assumes an attack would come from less than half the number of Sept. 11 hijackers and they wouldn’t be armed with rocket-propelled grenades or other weapons often used by terrorists overseas. (AP Photo/Chris O’Meara, File)

WILL VRAGOVIC | Times
ht_339291_vrag_nuclear_11 of 17 (06/08/11 Crystal River) Jim Holt, general manager of the Crystal River Nuclear Plant, talks about the high and low pressure turbines on the turbine deck which power the generator, at right, during a tour of the Crystal River Nuclear Plant held for broadcast and print media Tuesday. [WILL VRAGOVIC, Times]

WILL VRAGOVIC | Times
ht_339291_vrag_nuclear_11 of 17 (06/08/11 Crystal River) Jim Holt, general manager of the Crystal River Nuclear Plant, talks about the high and low pressure turbines on the turbine deck which power the generator, at right, during a tour of the Crystal River Nuclear Plant held for broadcast and print media Tuesday. [WILL VRAGOVIC, Times]

San Onofre nuclear generating station Unit One photographed on November 17 1992. UTSan Diego Photo/John Gibbins

The longest outage ever at San Onofre’s two existing nuclear reactors is set to test provisions and principles of California law designed to free utility customers from paying to operate power plants that are no longer useful.

Offline since January, the reactors are almost certain to stay shut through November, triggering an evaluation by state regulators of whether to reduce customer rates associated with the plant.

Consumer advocates have begun urging the California Public Utilities Commission to suspend billing customers for San Onofre’s operations, upkeep and mortgage — an $835 million annual obligation called a revenue requirement.

While provisions for significant “rate base” reductions are enshrined in California law, in practice they are seldom if ever called upon. Nationwide, concessions to ratepayers during outages are rare and can take years to negotiate.

At the Crystal River Unit 3 reactor in Central Florida, idled since a generator replacement project went awry in 2009, a utility-bill rebate of $228 million was negotiated this year in return for guarantees of future rate increases and other incentives to restart the plant.

Charles Rehwinkel, an attorney for Florida’s Office of Public Counsel who helped negotiate the intricate settlement on behalf of consumers, said the compromise was distasteful to some but avoided years of protracted litigation.

“You weren’t going to get an agreement where you say (the utility) is paying for all of the costs because you’re into the hundreds of millions” of dollars, he said.

Southern California confronted similar issues a generation ago during an extended outage at San Onofre’s original Unit 1 reactor, which operated from 1962 to 1992 and has been dismantled.

Taken offline for a routine inspection in February 1982, Unit 1 stood idle for nearly three years as plant operator Southern California Edison made modifications to meet new earthquake-safety standards.

The San Francisco-based Utility Reform Network urged state regulators to remove the reactor — a machine less than half the size of each current reactor — from utility bills.

The utilities commission set a Jan. 1, 1985, restart deadline, after which utility company stockholders would have to start paying about 20 percent of plant revenue requirements based on a complex rebate formula.

That never happened.

Edison restarted the unit weeks ahead of the deadline, while deferring some earthquake improvements. It was finally retired in 1992.

Restart plans eyed

The Division of Ratepayer Advocates has urged state regulators to follow a different historic example — from 1982, when the utilities commission declined to start charging ratepayers before the delayed opening of new Unit 2 and Unit 3 reactors.

The current shutdown at San Onofre Nuclear Generating Station began in January with a radiation leak that was traced to rapid wear among steam generator tubes carrying radioactive water. The faulty replacement generators were installed in 2010 and 2011.

Edison hopes to submit restart plans in early October for running Unit 2 at reduced power, while setting aside the analysis of more extensive damage to Unit 3. Federal safety regulators say it will take months to review the restart plans.